The paper deals with the problem of taxation and its potential impact on economic growth and presents some new empirical insights into this topic. The main aim of the paper is to verify an assumed nonlinear impact of corporate tax rates on economic growth. Based on the theory of public finance and taxation, we hypothesize that at relatively low tax rates it is possible that the impact of taxation on economic growth become slightly positive. On the other hand when the tax rates are higher a negative impact of taxation on economic growth could be expected. Despite the fact that the most of the existing studies find a negative linear relationship between these variables, we can also find strong support for a non-linear relationship from several theoretical models as well as some empirical studies. Based on panel data fixed-effects econometric models, we, as well, find empirical evidence for a non-linear relationship between nominal and effective corporate tax rates and economic growth. Our data consists of annual observations for the period 1999 to 2011 for EU Member States. Based on the results, we also estimated the optimal level of the corporate tax rate in terms of maximizing economic growth in the average of the EU countries.
Background: Transfer of knowledge from academia to business is one of the crucial issues for creating innovation. Creation of university spin-offs could significantly improve this transfer. Objectives: The main scientific aim is to examine the differences between universities in European countries and identify factors affecting the probability of creating the university spin-off. The paper is also focused on the differences in the specialization and financial sources of universities. Methods/Approach: We compare selected indicators for higher education institutions in European countries and examine potential determinants affecting the probability of academic spin-off formation. With respect to the main aim, the logit and probit regression analyses have been used. Results: Our results show that the creation of spin-offs is typical on the one hand for highly specialized universities or on the other hand for universities with a wide variety of study programs. They should also have an optimum number of doctoral students and have mostly less funding from tuition fees. Conclusions: Several indicators appear to play an important role in the formation of university spin-off. These indicators are the level of specialization, the share of tuition fees in the University budget, and the share of Ph.D. and foreign students.
Our research focuses on selected accountability mechanisms in the two countries. In Slovakia these are the Supreme Audit Office (SAO) and the Ombudsman. In the UK, at the national level we chose the Committee of Public Accounts (PAC), the National Audit Office (NAO) and the Parliamentary and Health Service Ombudsman (PHSO) and on the local level the relatively recently introduced local government system of Scrutiny and Overview.
The goal of our article is to assess the potential contribution of these accountability arrangements to the anchoring of social innovation in the public sector. The theory anticipates that accountability institutions such as the SAO and Ombudsman may create feedback loops supporting public innovations. We undertook detailed checks on the concrete situation in the Slovak Republic and in the UK. On the basis of the comprehensive set of data reviewed, including reports, interviews and more generally available information, we can confidently conclude that while in Slovakia such a feedback loop barely functions, in the UK it does function on a limited but still significant scale. In the last part we provide selected arguments why the Slovak situation is less positive.
The paper is focused on the problem of corporate tax competition in EU as one of the current key issues for EU member states tax policies. The main objective is to empirically verify theoretical assumptions about corporate tax competition among EU member states. Based on the available empirical data we analyzed trends in effective and statutory tax rates and tested the theoretical assumption of possible spontaneous tax coordination. We found almost no support for spontaneous tax coordination for EU as a whole, but it appears to be more evident among neighbouring member states as well as in within the same regions. The differences in corporate tax rates between neighbour countries are mostly smaller and tend to shrink over the time. We have used panel data cointegration analysis to test for, and DOLS and FMOLS panel estimators to estimate, the long-run parameters. Finally panel vector error correction models (VECM) were used to examine short-run as well as long-run dependencies among the corporate tax policies of neighbouring EU countries. Based on our results we find evidence for relatively strong relationships between neighbouring EU member states in corporate tax rate setting.
John Hudson, Colin Williams, Marta Orviska and Sara Nadin
Evaluating the Impact of the Informal Economy on Businesses in South East Europe: Some Lessons from the 2009 World Bank Enterprise Survey
The aim of this paper is to evaluate the variable impacts of the informal economy on businesses and employment relations in South East Europe. Evidence is reported from the 2009 World Bank Enterprise Survey which interviewed 4,720 businesses located in South East Europe. The finding is not only that a large informal sector reduces wage levels but also that there are significant spatial variations in the adverse impacts of the informal economy across this European region. Small, rural and domestic businesses producing for the home market and the transport, construction, garment and wholesale sectors are most likely to be adversely affected by the informal economy. The paper concludes by calling for similar research in other global regions and for a more targeted approach towards tackling the informal economy.
Matus Grega, Marta Orviska, Juraj Nemec and Colin Lawson
Many studies analyse factors (such as corruption, competitiveness, transaction costs), which are influencing public procurement efficiency. The purpose of this paper is to find out, what the main factors are in Slovakia that are influencing public procurement efficiency, and based on our analysis, we will also estimate what is the impact of each factor on the efficiency of public procurement in Slovakia.
The research for this paper was executed in three stages. We began with a small number of face-to-face in-depth interviews with specialist procurement advisors to contracting authorities. In the second stage, we created draft questionnaires for contracting authorities and for suppliers, and once we tested questionnaires, it was sent to 13,571 suppliers and to 4,300 contracting authorities. In the last stage, we used various types of analyses to examine identified factors.
There is significant agreement between suppliers and contractors that the two main factors causing inefficiencies are excessive bureaucracy and corruption or other ethical shortcomings. It is shown that insufficient competition, and the excessive use of the lowest price criterion for selecting winning bids, add further inefficiencies. Savings are greatest when there are between 6 and 8 bidders. E-auctions generally produce larger savings than more traditional methods, but Slovak procurement procedures are costly, compared to most other EU states.
This paper contributes to the understanding of what are the core factors which may influence public procurement efficiency. It also provides valuable information for government officials on how to change public procurement rules in order to achieve higher efficiency.
Vladimir Hiadlovsky, Jan Hunady, Marta Orviska and Peter Pisar
Background: The intensity of innovation could often be crucial for further economic development of the regions. Science and technology are often seen as the key factor supporting innovation in the regions. Furthermore, we can assume that higher intensity of research activities could lead to better economic performance.
Objectives: Research aims to examine the link between the economic performance of the region and the intensity of science and technology activities, proxied by the share of employees in science and technology.
Methods/Approach: The analysis is based on panel data for NUTS2 regions of the European Union (EU) member states. We conducted correlation analysis, panel Granger causality tests and regression analysis.
Results: Our results suggest the existence of a significant positive correlation between GDP per capita and the share of employees in science and technology. Moreover, the regions with a higher intensity of science and technology activities are mostly characterized by relatively low unemployment rates.
Conclusions: Research activities are positive correlated with regional GDP and negatively correlated with unemployment. However, increasing the share of employment in science and technology beyond a certain turning point would not lead to any further positive effects on regional economic performance.